What is Sustainability in Business?

DEFINITION

In an ever-changing world faced with the looming threat of irreversible damages caused by climate change, integrating sustainability in business is an absolute must. Numerous definitions have been given to the term, but at its most basic, sustainability is the “ability to meet the needs of the present without compromising the ability of future generations to meet their own needs.”

Integration of environmental, social, human and economic goals in policies and activities;

Equal opportunity and community participation/sustainable community;

Conservation of biodiversity and ecological integrity;

Ensuring inter-generational equity;

Recognizing the global integration of localities;

A commitment to best practices;

No net loss of human capital or natural capital;

The principle of continuous improvement; and

The need for good governance.

True sustainability has three main pillars: economic, environmental and social, which can also be referred to as people, planet and profits. Among the three pillars, the environmental aspect gets the most attention: organizations are becoming more conscious of their overall effect on the environment, and are now looking for solutions that can have a beneficial impact on the planet.

From the corporate perspective, sustainability in business (or corporate sustainability) means having a process to manage economic, social and environmental risks, obligations and opportunities. By extension, corporate sustainability is being resilient, or having the means to survive shocks because they are closely connected to healthy economic, social and environmental systems. Achieving sustainability will require solutions to address issues at the macro level, including economic efficiency, social equity and environmental accountability.

What is environmental sustainability?

As noted previously, environmental sustainability is the pillar of corporate sustainability that gets the most attention. John Morelli defines environmental sustainability as “a condition of balance, resilience, and interconnectedness that allows human society to satisfy its needs while neither exceeding the capacity of its supporting ecosystems to continue to regenerate the services necessary to meet these needs nor by our actions diminishing biological diversity.”

This pillar of sustainability is gaining the most traction given the environmental issues that the world is facing today. Businesses, in particular, are making contributions to the current state of the environment. Companies having more obvious environmental impact, such as mining and food production, also create significant changes to the environment.

Given that businesses are creating an impact on the environment, they have a responsibility to join the collective efforts in addressing climate change. As it stands today, climate change-related hazards are affecting most of developing countries, and may even have the potential to reverse decades of development gains. Furthermore, it brings numerous risks to ecosystems and biodiversity, not to mention hazards to human health.

With these repercussions, the focus on the environmental aspect of corporate sustainability is warranted. Organizations have the responsibility to prevent the disastrous effects of climate change by reducing their carbon footprints, packaging waste, water usage and their overall impact on the environment. At the same time, organizations can tap into opportunities that enable them to generate a positive financial impact on their end.

Companies must begin by operating with integrity: they must respect the fundamental responsibilities in the areas of human rights, labor, environment and anti-corruption. Sustainable companies must also be proactive in taking actions that support the societies around them. This will require a collaboration between companies and stakeholders to tackle major challenges such as corruption, climate change and discrimination.

Corporate sustainability also calls for a strong leadership and commitment by the chief executive, supported by the Board of Directors. This empowers them to instigate actions in key areas: board ownership of the agenda; adjustment to policies and practices; alignment of government affairs; training and motivating employees; pushing sustainability into the supply chain; and disclosing efforts and outcomes. Sustainability also drives businesses to be more transparent when it comes to measuring their impacts, as it will be indispensable in directing effective corporate strategies and inform their community and stakeholders. Finally, businesses are expected to actively support local and national priorities to further advance sustainability understanding.

Why must we practice corporate sustainability?

Corporate sustainability has been driving success for participants in the Global Compact. In fact, the initiative reported that 79% of participating companies have experienced an increase in trust after committing to sustainability.

There is a clear link between a company’s bottom-line and its environmental, social and governance practices: the health of a business will ultimately depend on the well-being of workers, communities and the planet. Companies also have the opportunity to deliver solutions that can address the world’s challenges.

Not only is corporate sustainability vital in protecting the environment, but it is also essential for long-term corporate success and for ensuring the continuous delivery of valuable products and services across society. Therein lies the challenge: it’s easy for business leaders to be satisfied with short-term gains when long-term success will require discipline and a strong and persistent mindset that can withstand market instabilities and uncertainties.

Another thing to note is the increase in the demand for responsible and sustainable management practices among a wide range of stakeholder groups. Other than a strong economic performance, stakeholders are now expecting social and environmental sustainability from organizations.

Integrating corporate sustainability is not without its benefits for an organization. Apart from reducing the risk of dealing with resource limitations and other cost issues, implementing sustainable practices allow them to renew their commitments to their core goals such as efficiency, sustainable growth and shareholder value. Publicly sharing a sustainability project can also drive public goodwill, thereby creating a better reputation for a company.

In the end, businesses are not inanimate entities: they have an inextricable connection to people, namely those that create, make, deliver, buy and use their products and services. By putting sustainability at the core of every business, they can drive progress in addressing the world’s most pressing issues. Organizations placing sustainability at the core of their processes can also be more resilient and adaptable to unpredictable changes in the environment. Though sustainability can definitely provide a competitive edge for businesses, it also gives them a more active role in the efforts against climate change.

ADEC Innovations is the leading provider of sustainable business solutions. To learn more, contact us today!